Snider v. Am. Family Mut. Ins. Co.

• Decision Date: 19 April 2013
• Docket Number: No. 103,340.,103,340.
• Citation: Snider v. Am. Family Mut. Ins. Co., 297 Kan. 157, 298 P.3d 1120 (Kan. 2013)
• Court: Kansas Supreme Court
• Parties: Eugene Wayne SNIDER, d/b/a West Heating & Cooling, Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE CO., Appellee.

297 Kan. 157

298 P.3d 1120

Eugene Wayne SNIDER, d/b/a West Heating & Cooling, Appellant,

v.AMERICAN FAMILY MUTUAL INSURANCE CO., Appellee.

No. 103,340.

Supreme Court of Kansas.

April 19, 2013.

Syllabus by the Court

1.Generally, an issue cannot be raised for the first time in a petition seeking this court's review of a Court of Appeals' decision because an argument not made before the Court of Appeals is deemed abandoned.

2.A Kansas court may not award attorney fees unless a statute authorizes the award or there is an agreement between the parties allowing attorney fees.

3.The question of whether a court has the authority to award attorney fees is a question of law over which an appellate court has unlimited review.

4.If a party would be entitled to appellate attorney fees under a statute or contract upon prevailing on appeal, the party must timely file a Supreme Court Rule 7.07(b)(2012 Kan. Ct. R. Annot. 66) motion in order to preserve the right to those fees.Any contrary language in Berkshire Aircraft, Inc. v. AEC Leasing Co., No. 90,581, ––– Kan.App.2d ––––, 2004 WL 797251(Kan.App.2004)(unpublished opinion), is overruled.

5.The Court of Appeals is duty bound to follow Kansas Supreme Court precedent, absent some indication the Kansas Supreme Court is departing from its previous position.

6.Even if the awarding of attorney fees is mandatory under a statute, the amount of the award is within the sound discretion of the awarding court, which means the award will be reviewed on appeal under an abuse of discretion standard.A judicial action constitutes an abuse of discretion if the action (1) is arbitrary, fanciful, or unreasonable; (2) is based on an error of law; or (3) is based on an error of fact.Where it is argued an action was arbitrary, fanciful, or unreasonable, the party alleging the abuse of discretion must establish that no reasonable person would take the same action.

[297 Kan. 158]7.In evaluating the reasonableness of an award of attorney fees, including the reasonableness of a fee allowed to a prevailing party by statute, a court should consider the eight factors set forth in the Kansas Rules of Professional Conduct Rule 1.5(a)(2012 Kan. Ct. R. Annot. 492).

8.A party aggrieved by a decision of the Court of Appeals on a particular issue must seek review in order to preserve the matter for Kansas Supreme Court review.

9.A prevailing party entitled to an award of attorney fees under K.S.A. 40–908 is also entitled to fees incurred in the successful defense of an initial fee application because the primary purpose of the fee-shifting statute is to benefit the insured.The fact that the award of such fee ultimately results in the insured's attorney being paid to litigate the fee is collateral and incidental to the primary purpose of indemnifying an insured for the cost of counsel in an action against the insurer.

10.When a prevailing party seeks an award of attorney fees under a prevailing party fee statute, the most critical factor in determining the reasonableness of a fee is the degree of success obtained because prevailing party status alone may say little about whether the expenditure of an attorney's time was reasonable in relation to the success achieved.

11.In supplemental fee cases, a party who prevailed on the underlying merits of a case is not automatically entitled to recover attorney fees for all aspects of the supplemental fee litigation.A court considering an award of attorney fees in supplemental fee litigation must consider the relationship between the amount of the fees awarded and the results obtained.Consequently, supplemental fees should be excluded to the extent that the applicant ultimately fails to prevail in such litigation.A party is only entitled to supplemental fees commensurate with the degree of success achieved in litigating those fees, and a court should calibrate the fees to account for the degree of success.

12.Where a fee applicant relying on a prevailing partystatute has achieved only partial or limited success, a court may attempt to identify specific hours that should be eliminated from a request for fees, or it may simply reduce the award to account for the limited success.

James E. Kiley, Jr., of The Kiley Law Firm, LLC, of Overland Park, argued the cause and was on the briefs for appellant.

Matthew W. Geary, of Dysart Taylor Cotter McMonigle & Montemore, P.C., of Kansas City, Missouri, argued the cause and was on the briefs for appellee.

The opinion of the court was delivered by LUCKERT, J.:

In Evans v. Provident Life & Accident Ins. Co.,249 Kan. 248, 265, 815 P.2d 550(1991), this court held that a party's request for civil appellate attorney fees is to be determined by the appellate court hearing the appeal.Supreme Court Rule 7.07(b)(2012 Kan. Ct. R. Annot. 66) provides a procedure for making such a request and specifies the time period after the appellate oral argument in which the request must be made.

In this case, Eugene Wayne Snider, d/b/a West Heating & Cooling, did not file a motion for appellate attorney fees in a successful appeal to the Court of Appeals that resulted in a remand to the district court.Snider v. American Family Mut. Ins. Co., No. 101,202, ––– Kan.App.2d ––––, 2009 WL 2902588, at *15(Kan.App.2009)(unpublished opinion)( Snider I ).In the district court proceeding on remand, Snider requested and received attorney fees related to both the district court and the appellate proceedings based on the authority of K.S.A. 40–908, a prevailing party attorney fee statute.Considering an appeal from that order, the Court of Appeals reversed the award of appellate attorney fees, determining Snider had waived his right to appellate attorney fees by not filing a motion for attorney fees with the Court of Appeals in the prior appeal.Snider v. American Family Mut. Ins. Co.,45 Kan.App.2d 196, 205–08, 244 P.3d 1281(2011)( Snider II ).

Now, on petition for review of that decision, Snider asks us to reverse the Court of Appeals and overrule Evans or exclude Evans' holding from those cases where a fee applicant did not prevail in the district court.This result would allow Snider to receive a judgment for the appellate attorney fees incurred in Snider I.In addition, Snider requests us to award him more fees for this current appeal—Snider II—than allowed by the Court of Appeals.We reject these requests and conclude that some aspects of Snider's arguments were not preserved; the Court of Appeals correctly applied Rule 7.07(b), Evans,andK.S.A. 40–908; and the Court of Appeals did not abuse its discretion in determining the amount of reasonable attorney fees related to this current appeal.Consequently, we affirm the Court of Appeals.

Facts and Procedural History

Snider held an insurance policy through American Family Mutual Insurance Company(American Family) that included coverage for “contractor's equipment.”After air conditioning condensers, tools, and equipment were stolen from his residential storage facility, Snider filed a claim with American Family under the policy.American Family denied his claim, and Snider sued.The district court granted summary judgment for American Family; Snider appealed.

The Court of Appeals reversed the district court's decision and remanded with directions for the district court to enter summary judgment in favor of Snider.The Court of Appeals also ordered the district court to determine the amount of attorney fees to be awarded to Snider under K.S.A. 40–908.Snider I,2009 WL 2902588, at *15.After appellate oral arguments, Snider did not file a motion for appellate attorney fees under Rule 7.07(b).

On remand, the district court held a hearing on the issue of attorney fees.Snider's attorney submitted an itemized list of attorney fees and expenses totaling $43,599.55.The district court awarded attorney fees to Snider in the amount of $5,000 and noted: “[T]his Court finds that Plaintiff's request is unreasonable on its face, especially requesting $22,000.00 to file and process an appeal.”Snider appealed the district court's award of attorney fees.

The Court of Appeals held the district court abused its discretion in failing to award a fair and reasonable amount of attorney fees for services rendered at the district court level.After considering the factors under Kansas Rules of Professional Conduct(KRPC)Rule 1.5(a)(2012 Kan. Ct. R. Annot. 492), the Court of Appeals determined that Snider was entitled to receive $19,500 in attorney fees for his attorney's representation in the district court plus $155 in costs.Snider II,45 Kan.App.2d at 211, 244 P.3d 1281.

Additionally, the Court of Appeals determined the district court“erroneously considered and included appellate attorney fees in its attorney fee award.”Snider II,45 Kan.App.2d at 203, 244 P.3d 1281.The court found that Snider failed to comply with Rule 7.07(b) because he did not file a motion for attorney fees with the Court of Appeals and did not submit an “affidavit specifying the nature and extent of the services rendered, the time he spent on the appeal, and the factors considered in determining the reasonableness of the fee.”Snider II,45 Kan.App.2d at 205, 244 P.3d 1281.The Court of Appeals also found the district court lacked the authority under K.S.A. 40–908 to grant attorney fees for appellate work.Snider II,45 Kan.App.2d at 206–07, 244 P.3d 1281.

Snider timely filed a Rule 7.07(b)motion requesting appellate attorney fees for his second appeal, Snider II.The Court of Appeals entered a separate order awarding an additional $11,554.79 in appellate attorney fees and $754.79 for associated costs.We granted Snider's petition for review in which he raises arguments pertaining only to appellate attorney fees for Snider I and Snider II.

Rule 7.07(b)and the Separation of Powers Doctrine

In his petition for review, Snider presents an argument he had not raised before the district court or the Court of...